SINGAPORE, 15 June 2022 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on new private home sales announcement for May 2022.
Developers moved 1,356 private residential units (excluding ECs) in May 2022, 107.7% higher than the figure of 653 units in April 2022. There were 4 new projects launched within the month – Atlassia, LIV @ MB and Piccadilly Grand in the Rest of Central Region (RCR) segment and Baywind Residences in the Outside Central Region (OCR) segment. Newly launched units amounted to 1,240 units in May 2022, 212% higher than April 2022’s 397 units. The take-up rate fell to 109% in May, the lowest since June 2021, suggesting that sales momentum have softened amid the heightened economic uncertainties.
The RCR segment accounted for more than half of total sales for the month, with the balance of sales split between CCR (16.8%) and OCR (33.9%) segment. However, the take-up rate is most buoyant in the OCR segment (199%), as homebuying demand were concentrated on more affordable homes in the suburban segment. Take-up rates in the Core Central Region (CCR) and RCR segments, on the other hand, stood at about 100%.
Within the CCR, the top-selling projects were Haus on Handy (24 units) and Leedon Green (19 units). The two projects collectively accounted for about 20% of the segment’s sale. The median price of units sold at Haus on Handy and Leedon Green inched up slightly by 2.1% and 0.9% respectively in May, compared to the preceding month.
Within RCR, the top-selling projects were Piccadilly Grand and Liv @ MB, which collectively accounted for about 62% of the segment’s sales during the month. Based on our analysis of the caveats, the stellar sales performances at Piccadilly Grand and Liv @ MB drove prices in the RCR segment in May. Price increases also correlated well with the sales progress of other projects launched earlier. For instance, at Normanton Park and Avenue South Residence, which are both over 90% sold, median prices of units sold in May 2022 were about 1.5% higher than April figure.
Price movements were somewhat mixed amongst the top-selling projects in the OCR segment. Among the top six projects, four projects (KI Residences at Brookvale, The Florence Residences, The Gazania, and Urban Treasures) saw higher median sales price in May, while two projects (The Watergardens at Canberra and Midwood) recorded lower pricing.
An analysis of the caveats showed that, in terms of buying demand by unit size, the stronger pace of price increases in RCR likely contributed to greater demand for units below 700 sq ft in May (31% of total units), compared to April (24%). About 56% of homes sold in the RCR were priced between S$1 million to S$2 million, compared to just 43% in April. In the OCR, buying demand gravitated towards larger units of 1,000 sq ft or more (55%), owing to greater affordability in the suburban. Over half of the purchases in the OCR were for units priced between $1 million to $2 million.
We expect the RCR and OCR to account for the bulk of sales for this year, given the affordability of their properties, which are a natural choice for upgraders and first-time homebuyers. Launch activity for 2022 as a whole is likely to be fairly moderate, given the moderate spate of collective sales over the past 18 months and the relatively low residential supply from the GLS. However, the expected launches of upcoming projects in suburban areas are expected to activate and help satiate pent-up demand. In addition, the fringe segment will also see demand as we progress along economic decentralisation with improving connectivity.
The significant and symbolic stepdown of DORSCON to yellow, the tight labour market and buoyant public resale market will continue to support homebuying demand. However, the looming grey clouds – ranging from geopolitical conflicts to supply chain disruptions to inflation and policy normalisation, and recent financial market turbulence, would undoubtedly cause homebuyers to exercise more prudence in big-ticket item purchases such as homes. Overall primary sales volumes for the year is expected to moderate to about 10,000 units this year from about 13,000 units last year. However, overall prices are still expected to inch up by around 2- 4% given the tight unsold inventory and relative affordability of new suburban homes to be launched.
For further information, please contact:
Seah Li Ching (Ms)
DID: +65 6393 2369